Paypal, a digital payment processing company, is set to explore its ways to introduce a stock trading platform for its users in the US, CBNC reported. Last year, the company launched a cryptocurrency service in the country. The company has already hired brokerage industry expert Rich Hagen to pave its way in the industry.
According to his LinkedIn page, Hagen is now the CEO of Paypal’s division called Invest at Paypal. Previously, he was the co-founder of the online brokerage company TradeKing, which was acquired by Ally Financial. Thereafter, he became President at the parent company for two years. His LinkedIn page says that his current job is to “explore opportunities in the consumer investment business.”
Paypal’s move to explore the stock trading industry comes in the wake of increasing number of investors. The COVID-19 outbreak has encouraged people to look for new career options. Moreover, the recent GameStop stock volatility surged the interest of people in the country in the stock market. Paypal is not a US-based company that is diversifying its business. For instance, its competitors Square and Robinhood offer stock and cryptotrading options on its platforms. According to CBNC, Paypal is looking for industry partners to enter the stock trading market.
Following the CBNC report, the stock of Payal rallied 3.5% while its competitor, Robinhood’s share tanked 3% on the same day. The report says that it’s highly unlikely that the service will be rolled out this year. To operate as a stockbroker, the company needs to complete a membership process through FINRA, a regulatory organization that regulates brokerage companies. The reported plan of Paypal comes amidst the announcement of the Securities and Exchange Commission (SEC) to set up a probe against online brokerage firms that encourage users to invest more in stocks.
“While new technologies can bring us greater access and product choice, they also raise questions as to whether we as investors are appropriately protected when we trade and get financial advice,” said Chairman of SEC, Gary Gensler, in a press release. SEC generally makes a public comment while drafting new rules for the exchange market, which can further pose a headache for the industry players.
Recent Paypal Developments
After launching a cryptocurrency service in the US, it launched the same service in the UK to increase its foothold in the industry. Paypal partnered with Paxos Trust Company to offer cryptocurrency services in the country. “We definitely have ambitions to continue to expand the product range in the U.S., the U.K. and other markets,” said Paypal’s general manager for blockchain, crypto and digital currencies, Jose Fernandez da Ponte, in a statement. With this service, the user can buy as little as £1 worth of bitcoin, etherum, bitcoin cash, or litecoin.
Last week, LinkTree partnered with Payapl to allow the former company’s creators to directly accept payments. “As the creator economy grows, creators want new ways to collect payments and support from their audience with as little friction as possible,” said LinkTree CEO and co-founder, Alex Zaccaria, in a statement. “We are excited to be collaborating with PayPal to further expand our solutions to our users globally and enable them to further manage and monetize their digital presence.” This will enable the company to allow its users to collect payments from over 200 countries through their Paypal account.
The COVID-19 pandemic has disrupted economic activities across the globe, especially in emerging economies. Earlier this month, Paypal partnered with the Government of India to provide COVID-19 relief facilities and drive awareness regarding prevention and care associated with the virus.